The problem with carbon tariffs: They aren't fair
Countries need to honestly address the issue of standards.
As the United States considers its own cap-and-trade system to reduce domestic emission levels, support is growing behind the idea of a "carbon tariff," a tax on imports from countries which are not undertaking similar environmental measures.
Recently, Energy Secretary Steven Chu endorsed the idea of a carbon tariff as a means of defending the international competitiveness of American industries. His concern is that other states will have an "unfair" trade advantage over the United States if we reduce greenhouse-gas emission and they do not.
What is not being debated is how much carbon other countries should be allowed to produce. Environmental scientists maintain that the planet can only sustain a finite amount of carbon emissions, but scientists do not tell us how to divide these emissions between nations. Yet this is the key issue in establishing what is fair in international trade as well as addressing climate-change issues globally. Without such a conversation on the distribution of global carbon emissions, carbon tariffs will not be effective.
For instance, if the United States decides to apply a carbon tariff, then it must decide how much carbon it gets to produce compared with other countries. The Boxer-Lieberman-Warner bill, for example, determines whether another country's environmental regulation is comparable to the US (and thus exempt from a carbon tariff).
The bill establishes a dividing principle that freezes everyone at their current share of greenhouse-gas emissions and requires that countries reduce emissions from these levels. Under this standard, the US, which represents less than 5 percent of the world's population, is allocated over 18 percent of the world's greenhouse-gas production.